Delve into an informative guide on the most widely used financial models and discover essential tips for reducing errors in your financial modelling process.
The most famous and widely used financial models are:
Three Statement Model
DCF model (Discounted Cash Flow Analysis)
LBO model (Leveraged Buyout)
M&A Model (Mergers and Acquisitions)
Trading Comps Model
Transaction Comps Model
Other
In order to minimize errors when building your financial models, follow five basic steps:
It’s very important to follow best practices in Excel when building a model:
Try to limit or eliminate the use of your mouse (keyboard shortcuts are much faster)
Incorporate a blue font for hard codes and inputs (but formulas should stay black)
Keep formulas simple and break down complex calculations into steps
Make use of cell comments (Shift + F2) for explanations, so the model would be easy to follow for you when you come back to it later as well as for the other users
Recommended Set Up (Alt F T F)
How to Learn Financial Modeling
Master financial modeling with hands-on training. Financial modeling is a technique for predicting the financial performance of a business or other type of institution over time using real-world data.
